CAIRO, Feb 18 (Jonathan Wright/Reuters) - Egypt's revolution and upheavals across the region herald a shift in the balance of power between Israel and its neighbors, as Arabs push out autocrats who often put U.S. and European ties before their people's demands.

The Egyptian revolt that put an end to President Hosni Mubarak's 30-year rule, is still in its early days. No one can yet predict who will be holding Mubarak's place as leader of the Arab world's most populous country at the end of the year.

But few of the likely outcomes include an extension of Mubarak's policies towards Israel that involved cooperation in blockading Gaza, hostility to Hamas and Hezbollah, and muted criticism of Israel's treatment of the Palestinians.

Unless the Egyptian military clings to power or elements of the ancient regime make a miraculous comeback, ordinary Egyptians will have more say in their country's foreign policy than at any time in the 5,000 years Egypt has existed as a political entity.

Judging by opinion polls and the views of most of the main political forces, Egyptians will be more assertive than Mubarak in backing Palestinian rights and less willing to comply with requests from Israel and its allies in the United States.

No significant group, not even the Muslim Brotherhood, is calling for outright abrogation of the Israeli-Egyptian peace treaty, a pillar of Israel's regional security strategy since Egypt's late President Anwar Sadat signed the document in 1979.

But between abrogation and a continuation of Mubarak's policies, the next elected Egyptian government will have a range of options likely to put Israel on the defensive and bring to an end the cosy relationship the Jewish state enjoyed with Mubarak.

Coupled with a recent shift in the policy of Turkey, now more outspoken in challenging Israeli policies, the Egyptian revolution marks, as Israeli politicians say they fear, a break with the strategic dominance they felt they had established.

The Middle East's tectonic plates are shifting, writes Peter Beinart, associate professor of journalism and political science at City University of New York.

For a long time, countries like Turkey and Egypt were ruled by men more interested in pleasing the United States than their own people, and as a result, they shielded Israel from their people's anger. Now more of that anger will find its way into the corridors of power.

DEMOCRATIC CREDIBILITY

A democratic transformation in Egypt, especially if it is replicated in other Arab states, would undermine one argument Israelis have made to win sympathy in Europe and the United States: that it is the sole Middle East democracy, an oasis of Western values surrounded by Arab despots ruling by force.

What is at stake here is the pretense that Israel is a stable, civilized, western island in a rough sea of Islamic barbarism and Arab fanaticism, writes post-Zionist Israeli historian Ilan Pappe.

The 'danger' for Israel is that the cartography would be the same but the geography would change. It would still be an island but of barbarism and fanaticism in a sea of newly formed egalitarian and democratic states, he writes.

Unlike their authoritarian predecessors, an Arab democracy would be able to criticize with credibility and a clear conscience Israel's conduct towards the Arabs it governs.

New Arab democratic rulers could highlight what they, and many in the international community, see as discriminatory practices towards Israeli Arabs, the use of violence to quell Palestinians challenging an occupation and Jewish settlement activity in the West Bank which major powers say is illegal.

Israel disputes such criticisms. It says Arabs in Israel enjoy more rights now than their compatriots in neighboring states, including a right to vote for Arabs in their parliament. They also say any use of force is to stop terrorism.

Israel has, nevertheless, been watching Egypt with concern.

Ultimately the people of Egypt are those who will decide their own fate, but Israel cannot profess a neutrality as to the outcome, Israeli Prime Minister Benjamin Netanyahu said.

I cannot simply hope for the best, I must also prepare for the worst, he told American Jewish leaders on Feb. 16 in Jerusalem, in a speech in which he said Israel was committed to peace and said he hoped Egypt would remain committed too.

Egypt was the first Arab country to sign a peace treaty with Israel, followed by Jordan in 1994. An interim accord was reached with Palestinians in 1993.

It is ironic that Israel ... seems so uncomfortable in a democratizing Middle East, says Beinart, adding:

But at root, that discomfort stems from Israel's own profoundly anti-democratic policies in the West Bank and Gaza. In an increasingly democratic, increasingly post-American Middle East, the costs of those policies will only continue to rise.

There is no end to the wave of protests that have been sweeping the Middle East since the start of 2011.

Egypt's uprising followed one in Tunisia, which overthrew President Zine el-Abdine Ben Ali in January. Protests have erupted in Morocco, Algeria, Libya, Jordan, Yemen and Bahrain.

GRIEVANCES

Once a stable Egyptian government emerges, the litmus test will be how it handles the border between Egypt and Gaza, which has been more closed than open since the Islamist group Hamas took control of the densely populated territory in 2007.

Mubarak, in collaboration with Israel and in line with US policy, enforced strict limits on the movement of people and goods across the border, adding to the suffering and deprivation of the more than 1.5 million Palestinians who live there.

Egyptian state media supported the policy and took a relentlessly hostile line towards Hamas, portraying the group as troublemakers working for Iranian interests.

Yet an opinion poll by the Pew Research Center in February 2010 found that 52 percent of Egyptians were favorable towards Hamas, against 44 percent in the opposite camp.

Protests against Mubarak focussed on domestic grievances of poverty, corruption and repression. When protesters addressed foreign affairs, it was usually to oppose Mubarak's Gaza policy and his close U.S. ties, seen as betraying Arab interests.

The Muslim Brotherhood, which has historic and ideological ties with Hamas, is enjoying more freedom than at any time since the overthrow of the monarchy 60 years ago. It favors opening the border wide and good relations with the Islamists in Gaza.

Even liberal democrat Ayman Nour, who challenged Mubarak in the presidential election of 2005 and then spent three years in jail, advocates a renegotiation of the peace treaty with Israel, which was based on the Camp David accords of 1978.

In practice the Camp David accords have come to an end ... Some people believe that some of the terms are humiliating to the Egyptian side. I belong to this group, Nour told the Lebanese television station al-Jedid.

The treaty should go to a referendum, he said, a view shared by the Brotherhood, which says it would argue against approval.